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Word of Mouth Marketing for Your Small Business

It’s no secret. 

Consumer trust is getting harder to come by.  In an age of digital saturation, lower attention spans and rising costs of advertising, small businesses are starting to look elsewhere for customer exposure.  And they should be. Deep pockets, coupled with the increasing ease of hyper-local advertising enables big businesses to target specific audiences in specific ways and compete with small businesses like never before.

However, there is one marketing method that has proven to be extremely effective for small businesses for and is perhaps the oldest “marketing strategy” in the book… Word of Mouth.  The funny thing is that very few small businesses capitalize on this strategy even when they know it’s precisely how they get most of their new customers.  If you're not convinced - check out some of these stats:


Can "Word of Mouth" be a strategy?

Nearly 80% of business owners say they have NO formal referral program.  

Think about that for a moment. 

Referrals are obviously crucial for small businesses, but hardly anyone is putting any effort or resources behind them! 

I am astounded by how many business owners I’ve spoken with who only reaffirm these numbers.

When I ask a small business owner “how do you get new customers?”  9 out of 10 will respond with things like “it’s all word of mouth” or “pretty much through referrals”.

And when I ask “how much more business do you want?” - well, you can guess what the answer is here. 

What percentage of YOUR customers do you get through word of mouth? 

What if you were able to scale this method of “marketing”?

No matter the size of your small business, word of mouth is likely the most powerful method for both your short and long term growth. 

You probably already know this, but let me show you just how powerful this method can be, when harnessed correctly.

A telling story...

I was recently discussing the Seattle housing market with a real estate friend of mine. 

He has had some great success in recent years (not surprising) and was telling me about an “offer” he jokingly gave out to a mutual acquaintance a few years back. 

Apparently he didn’t think much of this person’s social circle so he promised he would give him $2,000 per referral if it resulted in an actual deal.

What I heard next was astounding.

This single referral source had generated 14 leads in the past two years, SIX of which resulted in a deal. 

This netted my friend just over $170K in gross commissions, in TWO years!

He could not have been happier to pay out the $12,000 to our mutual acquaintance and it sounds like they are working on more deals as I write this.  

I was completely blown away by this, and couldn’t help but think about the impact a referral source can have if they are properly incentivized. 

This was just someone I knew, but my experience in working with hundreds of small businesses keeps confirming the power of word of mouth.

Not only is it the greatest unknown asset for a small business, but I firmly believe that the future success of small business will depend on its ability to harness and incentivize referral sources. 

It’s the clear advantage a small business has over the “big boys”, which should be exploited and scaled to the max.

Exploit your best assets

No matter what business you are in, whether you’re just starting out or are simply looking for a way to ramp up sales, referral sources are everywhere, and they’re waiting to be leveraged. 

The great news for you is that you already possess these assets - you’re just not using them. 

Whether you’re just starting out or have an established business, think of the people you know who would be an advocate for your business. 

They might be family, friends, acquaintances or past customers.

Next, think of how many people you know who would be advocates for your business if they were properly motivated

I don’t mean starting a weird pyramid scheme where you get your family and friends to buy into some kind of “referral marketing program”. 

I’m talking about inviting people YOU know would make stellar advocates for your business to join forces with you in making your business great, and be rewarded along the way.  

The idea behind this is very simple, but the message needs to be crystal clear. 

You have thought of THEM as a person you would like to represent YOUR brand and you are going to make it very, very worth their while...


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